Govt increases duty refunds to Exporters despite of approaching Global recession

NEW DELHI: The Budget has increased the duty refunds to exporters, amid a looming global recession.The allocation under Remission of Duties and Taxes on Export Products (RoDTEP) scheme has been raised 10 per cent to Rs 15,069 crore in the next financial year from Rs 13,699 crore in 2022-23.

Finance Minister Smt Nirmala SitharamanhasalsohikedtheRebate of State and Central Taxes and Levies (RoSCTL) — a similar scheme for garments and made-ups — by 12 per cent to Rs 8,405 crore from Rs 7,461 crore. Both the schemes aim to refund exporters the embedded non-creditablecentral,stateandlocal leviespaidoninputs.

In RoDTEP, the increase is mainly on account of acknowledged “anomalies” in 432 products disoveredrecently.

Underthescheme,exportersused to get refunds in the range of 0.3 per cent to 4.3 per cent of the freight-onboardvalueofexports.

The Commerce Ministry has expanded the scope of RoDTEP by including sectors such as steel, pharmaceuticals and chemicals from December 15. The scheme will be reviewed in September: to gauge any calibration in the RoDTEP benefits is warranted to keep the offtake within the budgeted amount for FY24, officialssaid.

The budget has also increased the allocationfortheinterestequalisation scheme by nearly a fourth to Rs 2,932 crore in 2023-24 from Rs 2,376 crore in 2022-23. The scheme provides subsidies for pre- and post-shipment export credit and mostly covers labour-intensivesectors.

The budget has also increased the funds under the market access initiative (MAI) to Rs 200 crore in 2023-24fromRs160crorein2022-23.

A. Sakthivel, President, Federation of Indian Export Organisations (FIEO), said the allocation under MAI may not be adequate. A greater allocation will ensure more exporters can participate in global trade shows, which need to be exploited more intensively.

“A planned scheme for aggressive overseas marketing may be notified with a sizeable corpus to encourage exporterstoshowcaseglobally.”

Merchandise exports shrank 12.2percentinDecemberfromayear ago, the second contraction in three months because of a slowdown in demand in the wake of aggressive ratehikesbymajorcentralbanks.

Mostforecastshaveindicatedthat 2023 will be tough on trade as large globaleconomiesareslowingdown.